Sunday, 1 January 2017

UK firms’ finance bosses say uncertainty is ‘new normal’

UK finance chiefs have become more optimistic about the future, even though uncertainty is now the “new normal” for businesses.

A survey by Deloitte found that 27% of 119 finance directors whom the accountancy firm questioned in the fourth quarter were more optimistic, helped by better GDP growth.

That compares to 16% in the third quarter.

However, two-thirds of them are still worried about the impact of Brexit.

“Ahead of the referendum Brexit was seen by chief financial officers [CFOs] as the most significant risk facing their business,” said the report by Deloitte.

“In the wake of the vote, in late June, optimism dropped to the lowest level since the global financial crisis. CFOs battened down the hatches, pulling back on investment and spending. Since then the UK has proved more resilient than expected and talk of the UK falling into recession has abated”.

Despite the rebound in business confidence, most finance bosses expect more economic and financial uncertainty following Brexit.

Nearly half of those surveyed plan to cut spending and take defensive measures to protect their balance sheets and build up cash over the next year.

About 48% also expect hiring and mergers and acquisition activity to slow down.